What kind of spark will collide when the U.S. Department of Commerce's 'official certification' meets blockchain projects? Since September, the Pyth Network (PYTH) has provided an answer with a 94% surge - after announcing cooperation with the U.S. Department of Commerce and Chainlink to anchor core economic data such as GDP and PCE to the blockchain network, the PYTH price skyrocketed from around $0.11 to $0.22, setting a new five-month high and becoming a benchmark case of 'policy-driven benefits' in the crypto circle.
However, this carnival did not last long. Looking back at the market at the end of August, PYTH actually had a previous 'highlight moment': it surged from $0.1085 to $0.2489, a 130% increase that made many investors believe that a 'new narrative leader' had been born. But now, after the heat has faded, it has retreated back to the range of $0.16-$0.17, with technical indicators flashing red - the RSI quickly fell below 40 after the surge, the MACD histogram continues to narrow, and the short-term moving averages are turning downward, all signals are suggesting that 'bullish momentum is waning', and market divergence regarding its subsequent trend is becoming increasingly intense.
On one hand, there is the strong narrative support of 'official cooperation', while on the other hand, there is the reality pressure of 'supply dilution'. Is PYTH's target of $2 an unattainable fantasy, or a long-term opportunity worth laying out?
First, let's look at the core logic of this surge: the U.S. Department of Commerce chose to cooperate with PYTH and Chainlink, which is no coincidence. As a protocol focused on 'real-time financial market data on-chain', PYTH's core value lies in solving the issue of 'data credibility on-chain' - previous blockchain projects often relied on centralized data sources to obtain traditional financial data (such as stock prices and commodity market conditions), which carried the risk of manipulation or delay; while this time accessing GDP (Gross Domestic Product), PCE (Personal Consumption Expenditures) and other data that serve as 'weather vanes' of the U.S. economy means that PYTH has for the first time incorporated 'national-level official data' into the on-chain ecosystem, not only providing technical endorsement but also opening up new scenarios for 'traditional macro data + blockchain applications'.
For example, future DeFi (decentralized finance) projects can directly design derivatives based on PYTH's on-chain GDP data - when GDP growth is below expectations, it automatically triggers interest rate adjustments for bond-like products; or allow stablecoin issuers to refer to PCE inflation data to dynamically adjust anchoring strategies. This combination of 'official data + on-chain applications' is a height that most previous blockchain projects have struggled to reach, and it is precisely this point that makes the market short-term expectations for PYTH so high.
However, the halo of 'policy benefits' ultimately has to face the test of 'market supply and demand'. Currently, PYTH's biggest hidden danger lies in the acceleration of 'supply dilution'. Data shows that from the beginning of 2025 to now, PYTH's circulating supply has increased by 43%, expanding from about 8 billion to 11.4 billion, and according to the project's white paper, there are still large amounts of team unlocks and ecological incentive tokens to be released. This means that even if demand increases due to official cooperation, the continuous expansion on the supply side will continuously dilute the token's value - just like a glass of sweet water, adding more water without adding sugar will naturally reduce its sweetness.
Some crypto analysts have calculated: if PYTH wants to reach the $2 target, based on the current circulating supply of 11.4 billion pieces, its market value needs to reach $22.8 billion, which is close to a quarter of the current market value of Solana (SOL). However, the problem is that PYTH's current actual application scenarios are still relatively singular - besides data on-chain, there are no large-scale DApps (decentralized applications) that rely on its data services; in contrast, SOL supports a market value of hundreds of billions thanks to its diverse ecosystems such as DeFi, NFT, and gaming. More critically, if the circulating supply continues to grow in the future (with a 43% annual growth rate, the circulating supply may reach 16.3 billion by 2026), to sustain a price of $2, the required market value would exceed $32.6 billion, undoubtedly increasing the difficulty.
Looking at the price predictions given by analysts, one can also see this divergence: in the short term, the 2025 target price is generally around $0.37, indicating a potential increase of 130% from the current $0.16, but this target needs to be based on 'official cooperation exceeding expectations' - for example, more government departments of various countries connecting to PYTH, or mainstream DeFi protocols adopting its data on a large scale; while the long-term forecast of $16.25 for 2030 relies more on the industry trend of 'blockchain data services becoming traditional financial infrastructure'. If PYTH can monopolize over 50% of the 'official data on-chain' market in the next 5 years, then it might touch this target. However, to rush to $2 in the short term would require an 11-fold increase from the current base, unless a super favorable event like 'the U.S. Treasury directly adopts PYTH to issue on-chain national bonds' occurs, otherwise the difficulty is enormous.
The current market's dilemma lies here: investors holding PYTH are reluctant to give up the long-term narrative of 'official cooperation', fearing they will miss the next round of skyrocketing; those holding coins and waiting are concerned about 'supply dilution' and 'technical weakness', afraid of becoming high-level bag holders. From $0.1085 to $0.2489, and now to $0.16, PYTH's price fluctuations have long proven that relying solely on short-term stimulus from 'policy benefits' is difficult to sustain continuous increases; what truly determines its height is whether the 'application landing speed' can outpace the 'supply growth speed'.
For example, if PYTH can drive more than 10 mainstream DeFi protocols to access its official economic data in the next 3 months, or attract traditional financial institutions (such as investment banks and asset management companies) to use its data services, then the target of $0.37 for 2025 may not be difficult to achieve; however, if it only stays at the level of 'official collaboration' without actual business implementation, then the fluctuation range of $0.16 may just be a 'downward continuation'.
For ordinary investors, PYTH's case is more like a 'risk education lesson': in the crypto market, 'official endorsement' is indeed a strong catalyst, but it is by no means a guarantee of 'profit without loss'. Especially when facing projects with continuously growing circulation, every surge requires calm reflection - is this round of increase 'value-driven' or 'emotional speculation'? Will the dilution speed of token supply devour future profits? After all, it only takes a week to drop from $0.22 to $0.16, while rising from $0.16 to $2 may require overcoming three major mountains of 'technical landing, ecological expansion, and supply control'.
PYTH's story continues, and whether the endorsement of the U.S. government can help it break the shackles of supply dilution, and whether the fluctuation range of $0.16 will become a new starting point, perhaps only time will tell. But what is certain is that in the crypto market, 'policy benefits' have never been the end but rather the starting point of 'value verification'.
